There are many things to be aware of when buying a home, it really can be a minefield! One person to carefully listen to the advice of is your property lawyer. They have been through the house buying and selling process with many clients and have lots of great advice - and coming from the legal corner - it is always good advice to pay attention to!

Thanks to the team at Homelegal we have a property lawyers view of 'traps for home buyers'. Read and beware!

Traps

1. Misunderstanding the type of property

There are various types of property including fee simple, crosslease, unit title, company share and leaseholds. Each has advantages and disadvantages that you should be aware of prior to purchasing. Misunderstanding the type of property you are purchasing or the interests in the land may result in an unexpected impact on your enjoyment and use of the property.

2. Misunderstanding the agent's role

Always remember the real estate agent is trying to sell the property at the best possible price for the vendor (the person selling the property). Don't show all your cards to the agent at the outset and don't disclose your financial limit to them.

3. Signing agreement under pressure

Putting in an offer can be exciting. Don't feel compelled to sign an Agreement straightaway. Once an Agreement is signed it is a legally binding contract. Make sure you understand what it is you are signing. Get your lawyer to look over it.  If you are unable to make contact with your lawyer get the agent to include a solicitor's approval clause.

4. Insufficient conditions

You have an obligation of good faith to the vendor. You can't use a finance clause, for example, to get out of an agreement if you have simply changed your mind. Carefully consider the reports you wish to obtain on the property before you sign e.g. builder's report, valuation report or LIM report. If any of these reports do not meet the standard you require you are able to cancel the Agreement. However as soon as the conditions relating to the reports are formally confirmed the Agreement is binding on you.

5. Deemed consent conditions

Avoid conditions that are deemed to be satisfied unless you notify the vendor. These are dangerous. If you don't confirm or notify the vendor that the condition is not satisfied they are deemed to be satisfied.

These house buying traps were provided by the team at Homelegal. Looking for more home buying advice? Check out our home buying guide, or to find out just what a lawyer is doing for you during the house buying process our Settlement section has a lot of interesting info.

It is always a good idea to get a building inspection before you commit to buying a house – either before making an offer or as a condition in your sale and purchase agreement.

When you get a building inspection done you are hoping that everything comes out OK, with maybe the odd minor maintenance issue identified here or there in the building report – but what if there is something unexpected, something big, something that leaves you dazed and confused? Here is a summary of our advice on what to do…

First things first – are you still thinking of buying the house? If not – this is the easy bit – walk away! Tell your lawyer you are not going unconditional, or just don’t make that offer – easy! Or maybe not so easy as you have already invested time, money and emotion into the house...

So you are still interested in buying the house.  Now you need to work out how serious the problem is – a good person to question initially is your building inspector – you need to make sure that you fully understand the problem that they have identified in the building report. Remember, your building inspector is not an expert in all aspects of building so if a particular problem has been identified it is best to speak to, or get quotes from, an expert in the area.

Now that you have the full picture of the extent and cost of the problem you can make a decision with all the facts to hand. Now you can walk away, or continue as if nothing has changed, or begin re-negotiations with the vendor - either negotiating down the price or asking the vendor to fix what is wrong with the house.

If you have obtained this building inspection before even beginning negotiations you are now in a much stronger negotiating position. You can start price negotiations fully armed with exactly what is going on with the house and adjust your price accordingly.

If you and the vendor come to an agreement that involves the vendor having to complete work, or anything changes on a previously agreed sale and purchase agreement, or anything else at all, this needs to be formalised in the sale and purchase agreement by your lawyer.

Finding something wrong during a building inspection is the main reason why you need to give yourself plenty of time to get a building inspection done – at least 5 working days is a minimum! You never know what you are going to find, and what processes you are going to have to go through after getting the building inspection and reading the building report.  So give yourself plenty of time and don't rush any decisions.

For a more comprehensive rundown of your options when there is something wrong with the building inspection – head here.

We have more great advice, tips and information about house buying in our house buying guide - make sure to check out the section 'I've found a house!'
 
 




 
 

You have just seen the perfect house, you have looked at so many, you have missed out before, the real estate agent is asking when they can come around with the paperwork! It is all a bit of a rush... if you feel you can - take your time - sleep on it!

At least take the time to make a few checks. First double check your 'not negotiable' list – this list is not a wish list it is an ‘absolutely must have list’ - it is the list where you have worked out what you need in a new home. If the house doesn’t tick every box then it is either the wrong house for you or your list needs some work! We have some tips on how to make a ‘not negotiable’ list here.

Another good thing to think about at this point is what you want to achieve with this house purchase, what did you picture when you thought about a new home? Did you see your kids going to a great local school? Did you see weekends gardening? Did you imagine an office room or a spare room for guests? Did you imagine yourself renovating, maintaining or putting your stamp on a house? Did you see your family somewhere safe and warm? And how much did you want to spend?

It is a big decision, and it could be an expensive mistake if you get it wrong. So after sleeping on it and applying some rational though - you could be surprised at how your feelings have either firmed or wavered.

So take your time to make your decision, could this house be your home? If it is the right house for you it will still be available, and if it is not, there really will be another!

‘Sleep on it!’ Is the 1^st of the Propertytoolbox ‘10 Key Rules before you make that offer’ – check out the other nine!

Want some more helpful advice for the house hunt? The house buying guide has it all!

And if you want a helpful tool for deciding just what it is you want in a house - the Propertytoolbox house visiting checklist is a good place to get some ideas.

The Official Cash Rate (OCR) has been prominent in the news lately. That is because in the last 7 weeks it has gone up twice after staying unchanged for a year - it is now at 3.0%. What does this all mean? Well in a nutshell – if the OCR goes up, your home loan interest rate is likely to go up. But usually it is too late once the announcement is made to run out and get a cheap interest rate...

Banks (those guys lending you money for your home) spend a lot of time predicting what is going to happen to interest rates (the OCR movement is part of this) they don’t wait to see what happens at 9am on Monetary Policy Statement and Official Cash Rate review dates (which are usually Thursdays every 6 – 7 weeks apart ) when the governor of the Reserve Bank of NZ (RBNZ), currently found here, makes an announce that the OCR is either going up, going down, or staying the same.

Banks are usually well ahead of the game and have adjusted their fixed term mortgage interest rates well before any OCR announcement – especially those rates for fixed terms of one year and above. Usually, the only interest rates that change immediately when the OCR changes are floating interest rates.

The OCR is not the only factor banks use in setting your home loan interest rate. This interest rate is affected by many things  - one is the ‘funding cost’ – this is the amount  charged by the guys who are lending your bank money (this is the bit where the OCR has some effect) and another is what ‘margin’ your bank decides to put on top – this margin is usually based on cost and risk analysis. Over the last few years, the risk associated with your bank lending you money has increased - amongst other things - house prices have fluctuated and people's ability to make mortgage repayments has been influenced by an economy in recession. This has meant that a larger 'margin' has been added by banks to cover risk.

So should you take any notice of the OCR? Yes! But you need to be paying attention long before the change actually happens - when the OCR goes up (or down), unless it is a big surprise, the change has usually long since been factored into rates available – you are better off focusing more on what the OCR is predicted to be doing over the coming months and using this information when you are deciding about what to do with your home loan.

On OCR announcement days it is actually the commentary that goes along with the OCR announcements that has a greater affect on home loan interest rates. What is said by Dr Alan Bollard can have a strong affect on interest rate forecasting, this is the info that banks are after and are using in their longer term interest rate adjustments. Here you can find what Dr Alan Bollard said on the 29 July 2010 OCR announcement.

Want the run down on monetary policy including about how the OCR affects bank lending rates? Head this way!

Want some expert advice on where mortgage interest rates are heading and help with sorting out lending – a mortgage broker is a good place to start. You can organise a free chat with a local mortgage broker here. Otherwise, check out our mortgages and money section for all you need to know about borrowing for a home.

And don't forget - we have some solid home buying advice in our house buying guide.

Your LIM Report has arrived from your local council for the house you are looking to buy – now what! There is a lot of information in a LIM Report and knowing what to look for, knowing what it serious and what is minor, and wondering what is missing can make assessing the LIM Report a daunting task – you went to the time and effort of getting it – make the most of it.

Getting a LIM Report

You may have ordered your LIM as part of working through your conditions on an agreed sale and purchase agreement, or you may not have agreed the sale yet - the house may be for sale by auction or tender and you feel that a LIM is important to have before deciding on a price for the house – whatever the reason - the LIM Report needs to be gone over carefully.

Looking Over Your LIM Report

Read through the summary pages – potential issues are likely to be obvious here. Then dive into the main contents of the LIM. Look for outstanding financial obligations, resource consents, building permits, and related plans. Check that all issued consents have been signed off. For building work from 1992 onwards, check that a code of compliance certificate has been issued for works completed.




Take your personal knowledge of the property, its buildings, retaining walls, land use and the surrounding properties and the area and consider that against the information contained in the LIM. You should ask questions of the seller and the council if you find differences.

Getting Expert Help With the LIM Report Analysis

It is always a good idea to look over the LIM report with your lawyer when you receive it. Your lawyer’s experience and expertise regarding LIMs, combined with your knowledge of the property and your thoughts on what you intend to do with the property, will ensure that the LIM is understood and the full implications of any aspects of the LIM are realised.

Get additional expert help from a valuer or builder (the councils ‘on duty’ building officer is a great free resource), or any other relevant professional if you feel you need it to get the full picture.

What To Do With the LIM Report Results

Consider what impact the findings of the LIM report will have on your enjoyment of the property and the value of the property before you make your decision on whether this is the house for you.

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The Propertytoolbox House Buyers Guide

For all you need to know about LIM’s check out the Propertytoolbox information on LIMs. For everything else there is the Propertytoolbox Home Buyers Guide.

In previous post we discussed what Scrim and Sarking is and why it should be replaced. Then we talked about just what re-GIBing is. Now we are getting down to it – the money...

What is it Going to Cost to Re-GIB – The Basics

For a straightforward room (a small double room with not too many fiddly bits!) the cost of re-lining with plasterboard (re-GIBing) depends mostly on the wall area that is being covered. It can cost upwards from $800 - $1,000 per room to get the room to a state that it is ready for painting i.e. Plasterboard put up and plastering of the joins to give a smooth finish (GIB Stopping). This price would be for a DIY job with a GIB-stopper hired in. A big factor is whether you do it yourself or hire in the professionals – this will add a lot more to the cost - and if this is the way you are going - get a few quotes.




The type of plasterboard or GIB you use can impact on the cost – GIB Standard® is the most inexpensive – if you use GIB Aqualine® in wet areas such as kitchens, bathrooms and laundry’s or GIB Noiseline® where you want noise reduction then the will cost a bit more. To find out more about the GIB products check out their website.

What is it Going to Cost to Re-GIB – Wait! There’s More!

How you prepare the room for re-GIBing can impact hugely on the cost – are you going to strip all the Scrim and Sarking off? Or just strip off the Scrim and screw Plasterboard to the old Sarking board?

Commonly the Sarking board provides a horizontal bracing element for the house – i.e. there are no Dwangs behind Scrim & Sarking walls – you will need to replace this bracing element if you remove the Scrim & Sarking completely. This is now a structural issue – don’t ignore it! It important to address properly and may involve putting in new Dwangs and/or even using a product such as GIB Braceline®.

If you do remove the Scrim and Sarking completely you never know what you are going to find. Often you find relic’s from a bygone era in the form of old coins, bottles and cutlery, but less fun is finding rot – which will need to be repaired, and the source of the rot identified and fixed, before you can re-GIB. The costs of this kind of find can add up...

If you are planning on insulating (which is always a great idea!) this adds to the cost, and again, if you choose higher rated insulation or insulation with noise reduction properties the cost will increase.

How do you insulate if you are not removing the Sarking Board? You can take out every third board and feed the insulation in. This keeps the bracing element of the Sarking Board but allows you to insulate the wall cavity. Just remember where the missing boards are when you are screwing the GIB on!

Something that can really impact the cost of re-lining is what you decide to do with the existing covings, architraves and skirting board – can they be kept in place? Removed and reused? Or do they need to be replaced? The majority of re-GIBing situations require coving, skirting board and architraves to be removed.

Sometimes a ‘work-around’ can be arranged if you have intricate moulded covings you want keep. Re-GIBing can be done where the GIB butts up next to architraves and sits on top of skirting boards – but in most cases it is hard to get a good finish with this technique.

So replacing your Scrim and Sarking wall linings is going to take a bit of planning, and probably a bit more money than you thought - so make sure you have the time and the budget to do it properly before you start.

The Propertytoolbox Home Buyers Guide

Want more home buying info and advice? Head to our home buyers guide. With advice on all aspects of the home buying process - all you need is here.

Last week we discussed just what Scrim & Sarking is and how to identify it. Then we talked about why GIB should be replaced. Now, before we move on to the cost of re-GIBing, we are discussing just what re-GIBing is...

What Is Relining? Or Re-GIBing?

Relining or Re-GIB is when Scrim (or any other inferior wall lining) is replaced with plasterboard. In NZ Plasterboard is commonly referred to as GIB – this is the brand name for the most commonly sold form of plasterboard. GIB has been around for a long time and is considered an iconic NZ brand.

What is GIB or Plasterboard?

Plasterboard is a rigid board which is made by casting gypsum plaster and coating with paper. All plasterboard resists fire and is the most commonly used wall board product in new builds. Current building regulations require certain specifications for wall board and fire ratings for all walls. Modern plasterboard is designed to meet these requirements.

Once new plasterboard has been put up the final part of the re-GIBing process is GIB-stopping. GIB stopping is where the joins between the GIB sheets are plastered to give a seamless finish. While working out how to put up GIB just takes a bit of research, the right tools, planning and some muscle – GIB-stopping is a bit of an art! It pays to hire in some highly recommended GIB stopping talent for this bit.

GIB is made by Winstone Wallboards. On their website they have all the resources you need to find out about GIB and how to install it.

Re-GIBing – It’s Just a Small Part of Renovation

Re-Gibing it not just about putting up some plasterboard – it is an opportunity to sort out a lot of things in a room, when you strip off the old Scrim &/or Sarking Board you are going to get a window of opportunity to access difficult areas and usually inaccessible components of your house.

This is a great opportunity to insulate! Insulating exterior walls is a must, but even insulating interior walls with normal or sound proof insulation can improve your enjoyment of your home, keeping it warmer and quieter!

You can take the opportunity to replace old wiring in a room you are re-GIBing and even put in more plugs, light fittings and switches. What about wiring for speakers etc? And have you considered smart wiring (CAT 5)?

Next Post - Re-GIBing Scrim - What is it going to cost to re-GIB

The Propertytoolbox Home Buyers Guide

Want to find out more about how to identify problems with a house before you buy it? Check out our guide to building inspectors – or for a quick do it yourself read our house inspection tips.

Last blog post we discussed just what Scrim and Sarking was and how to identify it. This week we are discussing why it should be replaced. If you want to skip right to the practicalities check out our posts on - what is re-GIBing and what will it cost to re-GIB.

What’s Wrong With Scrim and Sarking?

Scrim and Sarking is a fire hazard – is it dry and brittle – having been aging and drying within your house for nearly 100 years. Combined with aged wiring, the risk of fire, and risk or significant damage from a fire, is much higher than that of a modern home.

Scrim wall linings are also very unsuitable for the purposes of redecoration. When scrim deteriorates, it comes away from the Sarking leaving an unstable base for painting or wallpapering (particularly in room corners – this is a very tell-tale sign of Scrim).

Why Should I Re-GIB?

Insuring your home can be problematic when you have inferior wall linings. Your insurance company will ask if your house has been relined when you get insurance, they consider Scrim & Sarking wall linings an increased risk factor for damage.

If you have Scrim & Sarking wall linings, especially combined with old wiring your insurance company may not be prepared to offer you their most comprehensive insurance policy.

Replacing Scrim and Sarking - The Result

Replacing Scrim and Sarking with GIB will give you a stable, fireproof, smooth wall that when GIB Stopped and redecorated (painted or wallpapered) will give you the ability to get a high quality finish. Removing old wall linings before re-GIBing also gives you an opportunity to access and repair the wiring, and insulation a room.

So to ensure you home is safe, to be able to get a comprehensive insurance policy and to get the most benefit out of any renovating and redecorating – removing Scrim and Sarking and re-GIBing is essential.

Next Post - Replacing Scrim with GIB – What is Re-GIBing?

The Propertytoolbox Home Buyers Guide

Still on the house hunt? Check out our house buying guide – we have all sorts of tips and tricks to help you make great house buying decisions.